Oligopolistic Competition in Power Networks: A Conjectured Supply Function Approach

Day,; Hobbs, R. W.; Pang,

doi:10.1109/mper.2002.4312211

Cited by 84 publications

(145 citation statements)

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“…Because transmission constraints can isolate markets and enhance market power, a number of models of strategic interaction on networks have been developed (see reviews by Daxhelet and Smeers, 2001;Day et al, 2002;Ventosa et al, 2005). Most models of generator competition take a general approach of defining a market equilibrium as a set of prices, generation amounts, transmission flows, and consumption that satisfy each market participant's first-order conditions for maximizing their net benefits while clearing the market.…”

Section: Literature Reviewmentioning

confidence: 99%

“…As further examples, Hobbs et al (2000) and Weber and Overbye (1999) have represented bidding games among competitive generators who are also Stackelberg leaders with respect to TSO decisions about transmission. Research is also being done on other symmetric games among generators, such as conjectural variations (Garcia-Alcalde et al, 2002), conjectured rival supply functions (Day et al, 2002), and bsupergamesQ in which collusive solutions are bounded by incentive compatibility constraints (Harrington et al, 2003). In addition, there are a few models of asymmetric games -in particular, Stackelberg games -in which larger generators act as Stackelberg leaders with respect to a set of smaller generators who are either Cournot players or price takers (e.g., Chen et al, 2003).…”

Section: Literature Reviewmentioning

confidence: 99%

“…Generating firms compete to sell power at the local price in each market (each node of the network, most generally), and they pay a TSO for transmission services from their generators to the point of sale. COMPETES is a static equilibrium model in which power producers either play a Cournot game at each node in the network (as in Metzler et al, 2003) or a more sophisticated CSF game in which producers anticipate that rival supply will respond in a locally linear manner to perturbations in energy prices (as in Day et al, 2002).…”

Section: B1 Competesmentioning

confidence: 99%

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Network-constrained Cournot models of liberalized electricity markets: the devil is in the details

et al. 2005

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Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Section: B1 Competesmentioning

confidence: 99%

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Network-constrained Cournot models of liberalized electricity markets: the devil is in the details

et al. 2005

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“…Originated from [20] and extended in several subsequent papers [9,31,36,37], the model considers several electricity firms competing in spatially separated markets along with an arbitrager, whose goal is to exploit price differentials between regions to maximize profit. Included in the firms' profit maximization problems is the arbitrager's full maximization problem; this leads to a multi-leader-follower game, where each leader (firm) solves an MPEC whose equilibrium constraint is the optimality condition of the arbitrager's optimization problem expressed as a linear complementarity system.…”

Section: Instance Ii: a Model With Endogenous Arbitragementioning

confidence: 99%

Quasi-variational inequalities, generalized Nash equilibria, and multi-leader-follower games

Pang

Fukushima

2005

Computational Management Science

344

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The noncooperative multi-leader-follower game can be formulated as a generalized Nash equilibrium problem where each player solves a nonconvex mathematical program with equilibrium constraints. Two major deficiencies exist with such a formulation: One is that the resulting Nash equilibrium may not exist, due to the nonconvexity in each player’s problem; the other is that such a nonconvex Nash game is computationally intractable. In order to obtain a viable formulation that is amenable to practical solution, we introduce a class of remedial models for the multi-leader-follower game that can be formulated as generalized Nash games with convexified strategy sets. In turn, a game of the latter kind can be formulated as a quasi-variational inequality for whose solution we develop an iterative penalty method. We establish the convergence of the method, which involves solving a sequence of penalized variational inequalities, under a set of modest assumptions. We also discuss some oligopolistic competition models in electric power markets that lead to multi-leader-follower games. Copyright Springer-Verlag Berlin/Heidelberg 2005Quasi-variational inequalities, leader-follower games, Nash equilibrium, electric power market modeling, oligopolistic competition, mathematical program with equilibrium constraints,

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“…We will focus here on game-theoretic formulations, although other approaches such as bi-level programming and mathematical programs with equilibrium constraints are also possible. References on the topic are numerous; with no claim of being exhaustive we mention [3,4,19,23,24,28,29,31,[60][61][62]77,91,109,110].…”

Section: Example 5 (Rolling Horizon Decomposition For Risk Averse Mulmentioning

confidence: 99%

Divide to conquer: decomposition methods for energy optimization

Sagastizábal

2012

Math. Program.

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Modern electricity systems provide a plethora of challenging issues in optimization. The increasing penetration of low carbon renewable sources of energy introduces uncertainty in problems traditionally modeled in a deterministic setting. The liberalization of the electricity sector brought the need of designing sound markets, ensuring capacity investments while properly reflecting strategic interactions. In all these problems, hedging risk, possibly in a dynamic manner, is also a concern. The fact of representing uncertainty and/or competition of different companies in a multi-settlement power market considerably increases the number of variables and constraints. For this reason, usually a trade-off needs to be found between modeling and numerical tractability: the more details are brought into the model, the harder becomes the optimization problem. For structured optimization and generalized equilibrium problems, we explore some variants of solution methods based on Lagrangian relaxation and on Benders decomposition. Throughout we keep as a leading thread the actual practical value of such techniques in terms of their efficiency to solve energy related problems.

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Oligopolistic Competition in Power Networks: A Conjectured Supply Function Approach

Cited by 84 publications

References 0 publications

Network-constrained Cournot models of liberalized electricity markets: the devil is in the details

Network-constrained Cournot models of liberalized electricity markets: the devil is in the details

Quasi-variational inequalities, generalized Nash equilibria, and multi-leader-follower games

Divide to conquer: decomposition methods for energy optimization

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